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Author Robb, Alicia M. ♦ Smith, Sheryl Winston ♦ Martinez, Carmen ♦ Udell, Greg ♦ Mach, Traci ♦ Fryges, Helmut
Source CiteSeerX
Content type Text
File Format PDF
Subject Domain (in DDC) Computer science, information & general works ♦ Data processing & computer science
Subject Keyword Young Firm ♦ Changing Economic Environment ♦ Financial Shock ♦ Bank Loan ♦ Financial Crisis ♦ Firm Survival ♦ Bank Credit ♦ Credit Score ♦ Subsequent Outcome ♦ Various Measure ♦ Financial Reform Legislation ♦ Early Year ♦ Objective Measure ♦ Relative Importance ♦ Bank-lending Practice ♦ Major Change ♦ Crucial Question ♦ Financial Crisis Alter ♦ Financial Resource
Abstract In the aftermath of the latest financial crisis, policy-makers at all levels are concerned about the impact of the crisis on access to financial resources by young firms, particularly as major changes occur in bank-lending practices and uncertainties surround the implementation of financial reform legislation. In this paper we examine the use of bank loans in firms during their early years of operations, and how these are altered in the wake of the financial shocks of 2008. We address two crucial questions: 1) what characteristics of startups—and their founders—are related to seeking and receiving bank credit and 2) how did the financial crisis alter or amplify this dynamic. We explore the factors that mitigate the decision to apply for a loan and the subsequent outcomes of firm survival and growth. Our work provides insights into the relative importance of supply and demand for financing both prior to and subsequent to the financial shocks. We leverage various measures and perceptions to disentangle the decision to seek bank loans from the likelihood of receiving a loan based on credit scores and other objective measures.
Educational Role Student ♦ Teacher
Age Range above 22 year
Educational Use Research
Education Level UG and PG ♦ Career/Technical Study
Learning Resource Type Article